May 2, 2025 • 37 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Pursuits Auto Columnist Hannah Elliott joins to discuss the latest tariff drama and the automakers who are paying the price. Sarah Barnes-Humphrey, Supply Chain and Logistics Expert, and Founder of the 'Let's Talk Supply Chain' Podcast, joins to break down trade war impacts, supply chain challenges and how companies are managing to ship products. Bloomberg News Senior Editor Nina Trentmann breaks down the upcoming edition of the Bloomberg CFO Briefing and how CFOs are approaching deal-making. Drive to the Close with Alexis Browne Roberts, COO at Alexis Investment Partners.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insights on the people, companies, and trends
shaping today's complex economy. Plus global business, finance and tech
(00:23):
news as it happens the Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
As we saw with some of the last earnings, including
Apple and Amazon, tariffs are definitely making their mark on
many industries. We've talked about that a lot over the
last couple of hours, none more though perhaps so than
the auto industry, as we've reported on a lot as
well here at Bloomberg, and as Bloomberg's Hannah Elliott writes
in this week's Pursuits newsletter, quote, confusion and chaos have
rained since President Trump signed a proclamation on March twenty
(00:55):
six to implement a twenty five percent terrify autos and
parts imported into the United States. So what's a global
auto maker to do? Kind of looked into it. She
is Bloomberg Pursuit's autocommist co host of the Hot Pursuit podcast.
It can be found on the Bloomberg at Bloomberg dot
com and wherever you get your podcast. She joins us
from LA kinda great to have you here with Emily
and me Big Picture if we can just start there
(01:18):
and then we'll dig into the newsletter. But it all
kind of relates when you have conversations with global automakers.
How are they continuing to think about the tariffs, the
global tariffs, how they're managing and how they continue to
think about their global supply chains and sailing in the US.
Speaker 3 (01:36):
Yeah, it's been really interesting, and like we've talked about before,
it seems like each automaker is doing something slightly different.
I'll give you an example. Mercedes just announced this week
that they are going to actually be moving production of
one of their core segment vehicles. We don't know which
one yet, but they will be moving production of.
Speaker 4 (01:55):
That vehicle into the US. So this is how they
are coping.
Speaker 3 (01:58):
They're just saying, basically, all right, if we're gonna be
taxed on vehicles we import, we're gonna start making more
vehicles in the US.
Speaker 4 (02:06):
So that is one example.
Speaker 3 (02:08):
Ferrari, as we've talked about, has just said we're gonna
have a ten percent across the board increase in prices.
Let's be honest, probably not a lot of Ferrari owners
are going.
Speaker 4 (02:17):
To bat any at that.
Speaker 3 (02:18):
In fact, maybe it makes the cars even more desirable.
Asin Martin for instance, has said they're going to stop
importing new cars for the moment, put a pause on
it and see how this all shakes out. So again,
it's like case by case by case. The main thing
that I hear that everybody is saying is just it's very,
very difficult to plan when you don't know what the
(02:40):
target is. They would like some consistency and a target
that doesn't move, and the target.
Speaker 4 (02:45):
Is still moving, which makes it difficult to.
Speaker 5 (02:48):
Plan well, but it sounds like Mercedes is at least
planning a little bit. Do you do you know any
more details about just kind of like how they're gonna
do this, because are they gonna build a new factory
and they still have I'm assuming many many different car
parts that are all going to go into this vehicle.
(03:09):
It it just sounds like a lot of not to
have a pun here, but a lot of moving parts.
Speaker 4 (03:14):
That's a great question, Emily.
Speaker 3 (03:17):
The good thing that Mercedes has going for is it
already is established in the US as a major major builder.
Mercedes has been here for decades. They've got a factory
in the South. They have over eleven thousand employees that
are US workers, plus four hundred suppliers or so, all
in the US. So this is not as necessarily a
(03:38):
heavy lift as if they had nothing and then they're
just going to decide we're going to build a new
factory and do all these things.
Speaker 4 (03:44):
They're very firmly established.
Speaker 3 (03:45):
In fact, what Ola Collinius told me about a month
ago when I was with him in Rome is that
they consider themselves an American company. And I know that
sounds a little bit weird, but considering how long they've
been in the US and how many Americans they employ,
Ola was really making the case that, hey, we are
an American company. Let's not forget even a company like Tesla,
(04:07):
which does have factories in California and Texas, also has
a big factory in China. So you kind of get
into this question of what is really American.
Speaker 4 (04:16):
It's a bit of a gray area when you start.
Speaker 3 (04:18):
Really counting components and imports and production and all of that.
Speaker 2 (04:22):
Now, I was kind of impressed by those numbers. I
didn't realize how first of all, how long Hannah, and
how much that they were doing. I knew they did some,
but I didn't realize so much the presence. So they
can really say made in America completely.
Speaker 4 (04:36):
BMW's in the same position.
Speaker 3 (04:37):
They've got literally, I believe eleven thousand workers in the US.
Their plant in Spartanburg has been there for years. They
really are part of the fabric, especially in the South,
providing a lot of American jobs. So their argument is, hey,
why are we being penalized as if we are not
putting things back into the country.
Speaker 5 (04:56):
Okay, tell us about what's happening in Miami this weekend.
I don't think you're going, but you know the plans.
Speaker 4 (05:04):
I know the plan I am this year.
Speaker 3 (05:06):
I am not going, but of course, this is year
four of Formula one in Miami.
Speaker 4 (05:12):
It's funny you should mention it.
Speaker 3 (05:13):
Just this week we spoke with Allie Berriman, who's the
driver for Hawes. He's nineteen years old. This is his
first year in Formula one. Clause, of course, is an
American team. He's racing in Miami this weekend.
Speaker 4 (05:26):
It's going to.
Speaker 3 (05:26):
Be a really big deal because I just saw that
they have extended the deal to keep the race in
Miami for until twenty forty one. So we're gonna be
in Miami for a while. And the parties.
Speaker 4 (05:39):
Look really extreme.
Speaker 3 (05:41):
I just saw they've got Tso DJing too, so it's
gonna be a big weekend.
Speaker 2 (05:46):
It's quite an event, right, no doubt about it. Hey,
listen before you go. In the newsletter, you also talk
about what you've been loving lately. It's actually in our backyard.
It's in Brooklyn.
Speaker 4 (05:58):
Oh, Wheels of New York.
Speaker 3 (06:00):
This has been This is my favorite car show that
I've been to in a year at least.
Speaker 4 (06:05):
It was so cool.
Speaker 3 (06:06):
It's Wheels of NYC is the Instagram handle. It was
a car show of vintage cars, everything from Ferraris to
like Grand Nationals like Kendrick Lamar loves the Porsche's to
Rolls Royces, and the vibes were good and it was
in the Brooklyn Navy Yard.
Speaker 4 (06:23):
I just had the best time. I loved.
Speaker 3 (06:24):
I highly recommend anyone going. They're gonna have another one
pretty soon.
Speaker 2 (06:27):
So it's not a show that I've heard about it.
I mean it's been around for a while. No, it's new.
Speaker 3 (06:32):
No, it's new, it's niche. This is not a big
established This is like a very grassroots organic it's not corporate.
It's just people who love cars. And I just love
that it was all ages, all races, all different types
of people and styles, and everyone was just happy. It
felt like a little slice of heaven. It was really great.
Speaker 5 (06:54):
Okay, very quickly you got an email from Porsche. It
was a mysterious note they're building this. Well, this picture
that you have in the newsletter, I don't know if
it's it's a makeup, if it's AI, or it's a
real car.
Speaker 4 (07:06):
Yeah, it looks crazy.
Speaker 3 (07:08):
Porscha likes to tease us with these special projects that
they have.
Speaker 4 (07:12):
The short of it is this.
Speaker 3 (07:14):
The Portcha nine seventeen is a very famous race car.
They actually made one that was legal for the street,
and Porscha has has sort of teased us, teased us
with a picture of the car and then sort of saying,
something's happening in June. Now we all know, as you
know that Lemon, this big endurance race happens in June,
(07:35):
so it's kind of like, are they going to be
bringing a car back to race? You know, are they
making a new one? We don't really know, but I
think it could be something road legal that we might
see in June.
Speaker 4 (07:47):
So stay tuned.
Speaker 2 (07:48):
Such cool stuff and it's all in the newsletter that
you can check it out. Hannah, thank you so much.
Have a good weekend. Bloomberg Pursued Auto columnist, cohost of
the Hot Pursuit podcast.
Speaker 4 (07:59):
Download it.
Speaker 2 (08:00):
This is Bloomberg.
Speaker 1 (08:01):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eas during it.
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
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Speaker 2 (08:16):
Hey, folks, we're going to stay with supply chains. We've
got someone who's been following, studying, talking about supply chains
for more than two decades. We head to Florida, Sarah
Barnes Humphrey. She's an entrepreneur and an influencer, as we mentioned,
studying supply chains for a long time. She's founded the
Let's Talk Supply Chain brand and podcast. She's also co
(08:36):
founder and CEO of a bid and freight platform called
ships Inc. And she joins us. Hey, Sarah, good to
have you here. Before we get into the nitty gritty,
tell us about your study of supply chains for the
past two decades, because it's obviously a super timely topic today.
But I don't know that everybody cared so much a
(08:57):
few decades ago, maybe during the pandemic, but necessarily twenty
years ago.
Speaker 6 (09:02):
Yeah, no, they definitely didn't. Thanks for having me on
the show.
Speaker 7 (09:05):
So I've basically been talking about supply chain at the
dinner table since I was nine.
Speaker 6 (09:09):
My parents owned a logistics company.
Speaker 7 (09:12):
And I worked in the family business operations and sales,
and then ended up funding our media business, which is
let's talk supply chain, so podcasts and live shows and
all sorts of things.
Speaker 5 (09:23):
Okay, so let's start high level. How are global supply
chains looking in the here and now? There's a lot
of fear about what.
Speaker 4 (09:32):
Tariffs are going to do.
Speaker 5 (09:33):
But in the here and now, what are you seeing?
Speaker 7 (09:36):
Yeah, so I was at a conference last week and
there was a lot of optimism. It was a breakball conference,
but I do know there's a lot of uncertainty. There's
a lot of supply chains being redesigned. I think the
mindset is going from what are the challenges to what
are the opportunities? How can we design our supply chains?
(09:58):
What does that need to look like. Examples I've seen
recently so Apple a couple of years ago, they moved
their production or they're manufacturing some of it into India,
and they did that because they wanted to use India
as a new consumer market for them. And it's really
paying off today because they're going to be able to
(10:18):
produce iPhones in India and skirt some of the tariffs
in China to be able to bring iPhones to the
US as well. And there's a couple of other examples
where you know, the electric vehicle maker Pollstar, they've paused
their annual forecast and they're shifting manufacturing to the US
and Europe, whereas Aston Martin is limiting exports to the US.
Speaker 6 (10:41):
So I think everybody's just sort.
Speaker 7 (10:43):
Of taking a look at how do we want to
spend our risk dollars, what does that look like, and
what do we want to do right now?
Speaker 2 (10:51):
Well, you know, I think about all the globalization everybody's
been pushing to over the last few decades, like that
was the way to go, go to the low cost producer,
you know, go to the countries that could do it
the best. It just kind of made a lot of sense.
Do you think that's over?
Speaker 6 (11:06):
No, I don't think it's over.
Speaker 7 (11:07):
I think people are waiting and seeing I think a
lot of retailers were able to get product out before
the tariffs hit. Some retailers are going to get hit
with the new tariffs. But I think there's a lot
of organizations that are pausing orders right now, which is
a bit of a problem right because if we think
about it, we're going into peak season, and peak season
(11:29):
is where retailers and organizations are bringing in products for
holiday season. So depending on how long this is going
to go will determine whether they're going to turn on
manufacturing again and whether they're going to order those products
for holiday season. So we might not actually see some
of the effects for another five to six months when
people are starting to shop for holiday.
Speaker 4 (11:52):
How is shipping looking right now?
Speaker 5 (11:54):
Because there were a few analysts earlier in the week
and even the week before who had started to fly
shipping data that cargo shipments are slowing, and then that's
going to mean that we're soon going to see shelves
empty because trade is just going to stop. Are those
fears overblown?
Speaker 8 (12:14):
No?
Speaker 6 (12:14):
I don't think so.
Speaker 7 (12:15):
The Port of Los Angeles came out with a stat
that said that they're going to see a decline of
thirty five percent, and they're also looking at every fourth
vessel not stopping at the port, and so what's going
to happen is not as much cargo is coming in,
and so the shipping lines are actually going to start
charging more.
Speaker 6 (12:35):
For container shipping as well.
Speaker 7 (12:37):
So not only are we going to have higher costs
for goods, but we're also going to have higher shipping
costs on container shipping because those vessels, those steamship lines,
they're not gonna want to lose money either.
Speaker 2 (12:50):
You know. Do you think I don't know, I think
about the negotiations between US and China or whether or
not there really is any negotiations, right, I mean, do
you think when all a said and done, that we're
going to find more reasonable trade deals created and it
will go back to kind of somewhat business as usual
or no, things are going to change dramatically going forward.
Speaker 6 (13:13):
So I'm not sure.
Speaker 7 (13:14):
I think at this point nobody really has a crystal
ball for that. I mean, if we think about what
has happened, do companies.
Speaker 2 (13:20):
Or do companies that you talk to or that you know,
do they think it's going to go back to more
of kind of business as usual, or they're not quite
so sure.
Speaker 7 (13:29):
They're not quite so sure right now either. I think
everybody is sort of in a wait and see type
mode at the moment with the changes that came in
for Sheen and Timu today, you know, we're seeing eighty
dollars shipments that now has close to sixty nine dollars
in shipping and imports import charges. So these are the
(13:51):
types of things that until it happens, we're not entirely
sure how long it's going to stay and what that
looks like, and so how do you plan for that?
So a lot of forecasting and planning is really hard
at the moment, and so supply chain teams have a
lot on their plates right now.
Speaker 5 (14:10):
I'm also wondering, you know, you talk about manufacturing, do
you think this idea that you know, companies are going
to be able to bring the manufacturing to the US
build factories. Here is the supply chain in the US
equipped to handle, you know, what could be an influx
of a ton more domestic manufacturing very quickly.
Speaker 7 (14:34):
Yeah, I think that's a great question, and I think
there could be room for some I'm not sure we
can do it all in the US. I think there's
a number of different factors. There's some labor factors. I
saw somebody the other day talking about how machinery into
the US because of the tariffs might be more expensive
as well.
Speaker 6 (14:55):
So I'm not sure we can.
Speaker 7 (14:56):
Necessarily equip those facilities with the machinery that we need
to manufacture either. And also, it takes a long time
to be able to set up manufacturing in a new location.
I mean, if you take that example of Apple that
I mentioned earlier, it's taken them a couple of years
to shift some of that manufacturing into India, and it's
(15:17):
paying off today because of the tariffs, But at the
end of the day, it's a really long term play.
And a lot of people were moving to Mexico and
now they're unsure how that actually fits into their manufacturing.
Speaker 6 (15:31):
Like Cadence as well.
Speaker 2 (15:33):
That's what's fascinating Sarah and I think this is something
that we talked about a lot after COVID. We would
have just even architects or developers coming in and saying,
you know where there's a lot of activity Mexico because
people are moving operations to Mexico and coming off of COVID,
we realized how vulnerable our supply chains really really were
(15:53):
and that we wanted stuff closer to home. And so
like that shift already started happening. I mean, what is
going on behind the scenes. Even with Apple you mentioned India.
We have talked with our mark German, who covers that
company flawlessly and in depth, and you know, we've been
having conversations how Apple was spreading out its supply chain
(16:16):
but still so relying on China still is. But then bam,
it was like, well, wait a minute, we can next
year have all the iPhones that are needed in the
United States come from India. So I feel like there's
stuff that's been going on very quietly. What are you
hearing about what companies are doing quietly as they continue
to maybe spread their supply chain around.
Speaker 6 (16:37):
Yeah.
Speaker 7 (16:37):
Again, I think they're looking at the design of their
supply chains. Where do I want to spend my risk dollars,
Where can I actually source the components that I need
to be able to create the products that I need.
Just another mention on Apple, they looked at manufacturing the
iPhone in the US and it would cost the US
consumer thirty five hundred dollars, So there's a lot.
Speaker 2 (16:58):
Of on the phone. I mean fat in my household,
and that's what almost ten thousand dollars. That's a lot, all.
Speaker 7 (17:06):
Right, go ahead, Yeah, No, I just mean like there's
it's different for different organizations, and supply chains look different
across the board. And so for some manufacturing in the
US makes sense, especially for medications and chips, for technology
and things like that what you were talking about coming
out of the pandemic. Those are the things we want
(17:28):
to manufacture close to home. But for some organizations it
really doesn't make any sense. Taking that Apple example, at
thirty five hundred dollars for an iPhone, nobody's going to
spend that kind of money. So I think it's a
bit of a push pull. Everybody's having this discussion. They're
looking at the design, Where can we source, where can
(17:49):
we purchase, Where can we manufacture? What makes the most
sense for us and for our customers.
Speaker 5 (17:55):
Sarah, what are you seeing from small businesses? What are
the particular challenges you know someone who's in the US
is going to face if they're a small business.
Speaker 7 (18:06):
Yeah, I think if they're a product based business, they're
sort of rethinking what it is that they want their
business to look like. I was recently reading an article
about there was a bunch of small businesses that were
sort of looking at the tariffs and saying, we want
to be exempt from it.
Speaker 6 (18:23):
And one of those.
Speaker 7 (18:24):
Small business actually said they're going to pivot from products
into services because that makes the most sense for.
Speaker 6 (18:30):
Them right now.
Speaker 7 (18:31):
And I think back to the pandemic and some small
businesses pivoted what product they were actually selling and someone
into hand sanitizer. So I feel like this is kind
of a similar thing at the moment that small businesses
were faced with during the pandemic.
Speaker 2 (18:48):
All right, So when you kind of watched, like probably
all of us, the news coming out of certainly the
White House, and then just kind of what you are
hearing from folks in terms of managing their own supply
chains and what you're seeing, I don't know, how are
you thinking about the next six months or so.
Speaker 7 (19:04):
I think that it's going to be very unpredictable. I
think that it's extremely uncertain right now, and if retailers
and organizations are pausing shipments at the moment, I don't
think we're going to see the ripple effects for another
five to six months, and I think we may see
some challenges over the holiday season. I think organizations are
(19:25):
sort of in a wait and see right And I
just don't think that anybody has the answers right now
until we figure out where those tariffs are going to land.
Speaker 2 (19:34):
Well and right, as you said, and we talked kind
of kicked off in the two pm hour, talking with
our Mike McKee, who follows the economy, and talking about
the jobs report, and it looked like things at this
point are doing pretty well. But the concern is when
this data starts to hit, whether it's consumers. We've seen
it in sentiment, but when it comes into the actuality
of it, I am curious. Are you thinking a recession
(19:57):
is likely too? From the conversations you're having in the
pe you're talking to.
Speaker 6 (20:01):
I'm not sure.
Speaker 7 (20:02):
Everybody's kind of all over the map. Some have said possibly,
some are saying we might not. I think it's too
early to tell, to be perfectly honest with you.
Speaker 2 (20:14):
Okay, yep, that's why we're on pins and needles. Not today.
Everything seems awesome today. Good to leave it there. Hey, Sarah,
thank you so much. Good to meet you and talk
with you. Sarah Barnes Humphrey, founder of Let's Talk Supply Chain,
joining us there from Florida.
Speaker 1 (20:30):
This is the Bloomberg Business Week Daily Podcast. Listen live
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Speaker 2 (20:49):
We talked about last week Amazon and Apple, both noting
kind of how their businesses were affected by tariff and
trade policies. Amazon going so far to note that processionary
fears and glob blackconomic and geopolitical conditions are in their forecast.
Another company that's got a great read on the consumer's Wayfair.
They reported earnings this week. They came in better than
expected as consumers brought forward spending while suppliers are holding
(21:12):
back from price increases. We caught up with Wayfair c
FO Kate Gulliver. We talked to earning's business, the outlook
and how the US consumer is doing.
Speaker 9 (21:21):
To your point, we had significant pull forward in the
category in the COVID time right, so in the sort
of twenty twenty twenty twenty one time since then, the
category has been down consistently since then. The category so
that was actually below you know, starting to be below
twenty nineteen levels.
Speaker 4 (21:37):
Right, So we're.
Speaker 9 (21:38):
Seeing a category that has historically been over the last
few years quite depressed, which may be different than you know,
some of the other consumer discretionary categories that the folks
are referring to. That said, yes, it's absolutely an uncertain environment.
Speaker 2 (21:52):
All right, everybody take a shot, because every time we
hear uncertain, I mean, that's it.
Speaker 6 (21:56):
Daked.
Speaker 10 (21:56):
That's the word of the year. I think I can
safely say.
Speaker 4 (21:59):
Totally, totally. All right, that's wayfair.
Speaker 2 (22:01):
CFO Kake Gulliver, Hey, let's get more into what CFOs
are doing in this environment. The conversation she's been having
with members of the CFO suite. Nina trentt menis senior
editor a Bloomberg News author of CFO Briefing newsletter. You
can find it at Bloomberg dot com slash CFO Dash Briefing.
A new one comes out on Sunday.
Speaker 4 (22:17):
How are you?
Speaker 11 (22:18):
Thank you? I'm good, that's good.
Speaker 4 (22:20):
Thanks for having me.
Speaker 2 (22:21):
Well, I'm curious the CFOs that you talked to how
are they feeling, Are they good? Are they saying uncertainty
or uncertain times a lot in conversations. What are you hearing?
Speaker 11 (22:29):
Yeah, and certainly is probably the number one word, which
sometimes is made harder by the fact that we aren't
supposed to be writing it so often, given that, well
what does this actually mean? And also we've heard it
a lot during the pandemic? She mentioned it, and so
the question is, of course, well, how do you navigate that?
Of course we need to give CFOs also a bit
of a pause, given that there's so many variables within
(22:53):
their equations that they just don't have any information about
tariffs being one of them. Way by sort of Yes,
it's fair to say that times are very uncertain for
CFOs right now.
Speaker 10 (23:03):
You have these two variables, and of course they're related.
The first is uncertainty again I say it about the
kind of broader economy and the trade picture, and the
second has to do with just the market volatility we've seen.
How is that impacting the appetite for deal making among CFOs?
I mean, going back to the campaign in the election,
there was this promise of the deal market opening up
(23:25):
and there was going to be a huge swell of them.
Has it come to pass. Are deals getting done?
Speaker 11 (23:30):
Some deals are getting done, yes, but we haven't necessarily
seen this huge rise or surgeon deals that people were
expecting because the deregulation that people were hoping for so
far hasn't really happened, and instead there has been a
lot of stuff that is not necessarily very conducive to deals, terrors, volatility,
market volatility, and so I think for certain deals, yes,
(23:53):
they're still going through. For example, Counagar this week announced
in a divestiture where they're selling one of their brands
to a PE firm. So those deals get done, and
I think they're assuming it's going to be done in
the next few months, so not necessarily a big challenge
for them. But I think then also we're seeing that
some deals are sort of hitting the brakes. I know,
(24:13):
deals involving China, involving other countries. So I think bilateral
deals and even multinational deals are very tricky these days.
Speaker 2 (24:21):
Yeah, it's interesting. I feel like we've been all talking
about especially the private equity guys, right the private world
just waiting for the environment so they can kind of
start selling stuff or things to go public. So that
they can kind of either return money to investors and
move on to new deals. Having said that, always love
the different CEOs CFOs. Excuse me that you talk to
different areas of our world. Tell us who you've been
(24:44):
talking to. You mentioned Canagra, but who else have you
been talking to and what they're saying?
Speaker 11 (24:48):
Yeah, So this week we spoke to a few CFOs.
Canago was one of them. Then we spoke to the
CFO full Seam, which is a Swiss materials concrete stuff
co create concrete maker.
Speaker 4 (25:01):
Correct, it's like the core of right.
Speaker 11 (25:04):
And then also a few a few other CFOs, including
SMP Global. Interestingly enough, those companies are amongst the companies
that are saying, okay, well, actually yes, the environment is tricky,
but still we want to pull ahead with with our deals.
So Whole SAM is in the process of spinning off
its US and North America business, something that had started
(25:28):
a while ago, so it's not something that they triggered recently,
but they're expecting that spin to to take effect in
May or in June. And I asked them, well, are
you going ahead with it? Isn't the market volatility a
tricky thing given that you're planning a spin off. This
involves to some degree markets have to be confusive. You
don't want the use your your shares to sell off
on the day that the spin takes effect, And they
(25:49):
were saying, well, no, the strategic rationale still is very
much true and wholes and therefore, yeah, we're we're pulling
through with the deal and we're we're not necessarily pausing it.
Interesting enough, they're also pointing out that the dynamics in
their business in North America versus in Europe are very different,
where they were saying, well, in North America we have
a lot of construction spending, and in Europe we are
(26:11):
focusing on decarbonization. For example, let's CO two heavy concrete,
as you pointed out, So they were saying, basically, it
makes a lot of sense for these businesses to be separate.
And so they think to some degree that the tariff
tensions that we're seeing right now and the divergence between
the US and the rest of the world might actually
be sort of like, to some degree a supporting factor
(26:32):
for the spin off, which was interesting because my assumption
was that they would be like, oh, yeah, well timing
isn't great.
Speaker 2 (26:38):
I think it's funny right strategy sometimes or fundamentals still matter.
Speaker 10 (26:41):
Yeah, I'm curious in the minute we have left, how
persuadable these CFOs are. So now you talk to folks
at advisory firms as well, what's the message that they're
conveying to CFO is just about whether or not to
move forward with deals or to pause or to reconsider them.
Speaker 11 (26:55):
Of course, advisory folks, to some degree always when they
talk to us, they want to talk to the books.
Some degree, what they tell CFOs is.
Speaker 4 (27:02):
Different than.
Speaker 6 (27:04):
Just kidding.
Speaker 11 (27:05):
But they've certainly told me that they have a lot
in the pipeline, and they see a lot in the pipeline.
I think what they are also telling their clients that
they work with is that, well, you need to really
do scenario analysis here, you need to sort of really
work through Okay, well, what are your assumptions, what do
you think is going to happen, and how will the
deal work in a different environment, just mentioning tariffs for example,
(27:29):
And so I think they were saying that select deals
still go through, that it's a case by case basis,
industry by industry basis. But yeah, I think they were
all hoping for more certainty as well. I think not
just the CFOs, but also the deal advisors for that.
Speaker 2 (27:47):
That's what's kind of wild. I think in this environment
are Diena, Marn't Adams too, just saying I don't think
I've ever seen a company come out and give you
two you know, earning scenarios could happen, this could happen
this way here, possibly recessioned so then not so good
things go back to normal. And I think it's just
this scenario led environment. I think companies do it all
(28:08):
the time, but this is like amped up in a
big way.
Speaker 11 (28:11):
Yeah, And also we're seeing sort of if you look
at the guidance that companies are putting out right now,
of course we've seen a fair amount of companies pulling guidance.
All we all also.
Speaker 2 (28:18):
See get like, okay, we can't give you an outlook,
but when you give like a couple of scenarios as wild.
Speaker 11 (28:23):
Well, we've also been seeing, of course, companies widening their guidance,
which then also gives them gives them more room to
some degree. It's understandable then also if you look at
it from the analyst perspective, like companies that withdraw their guidance,
that's basically for any analyst. Very difficult to then work
with in terms of factoring models. But figure out we're
all coming to the same question of not knowing what's
(28:43):
going to happen.
Speaker 2 (28:45):
Dare I say it uncertain? Take us away, everybody, Nina,
thank you so much as always, Nina Trentman, Senior editor
of Bloomberg News. Check out the CFO Briefing newsletter comes out
on Sunday on the Bloomberg and at Bloomberg dot Com.
How about you let me drive?
Speaker 7 (29:01):
Oh no, no, no no, this is not a toy's going
to drive?
Speaker 2 (29:05):
Alright, please, I'll do the gravels. Let's wat I want
to drive.
Speaker 6 (29:12):
It's good question. This is the Drive to the Clothes.
Speaker 1 (29:19):
Punster music, Well drivers on Bloomberg Radio.
Speaker 5 (29:24):
All right, time now for Drive to the Clothes with
Alexis Brown Roberts, COO at Alexis Investment partners with us
from Montgomery, Texas, and she's joining.
Speaker 4 (29:35):
Us right now.
Speaker 5 (29:35):
When the S and P five hundred is on track
for its longest streak of gains since two thousand and.
Speaker 2 (29:41):
Four, feels like a big deal.
Speaker 5 (29:42):
It feels like a big deal. But let's see what
Alexis thinks. Is this a sustainable bounce off of the
lows or are these gains just going to reverse soon
and then next week we're going to be talking about.
Speaker 2 (29:54):
Yeah, O, there's so much read exactly.
Speaker 8 (29:58):
Well, Hi, Carol and Emily. It's great to see you again, Carol,
and it's nice to meet you know, thank you both
for having me on. And that really a million dollar
question right now, isn't It's what investors are all asking
each other themselves. But we think it's sustainable. I mean,
we came into this year expecting a very volatile but
overall positive year, although admittedly a little bit of a
(30:20):
different path. We thought we were going to be more
positive in the front end and then have this volatility
in the back end. Looks like we're flipping that around.
But we do see this as being sustainable. I mean,
earnings are still doing well and honestly, there's a lot
of cash on the sidelines.
Speaker 2 (30:35):
And as I have to stop you because what's interesting
is you say earning's going well. Amazon, Apple, massive companies,
massive waitings in the s and P five hundred, the
Nasdaq one hundred. We talked with our Eric Greener about
this that it is unusual, especially Apple, you know, often
(30:55):
so goes Apple, so goes the market, and that to
see kind of broad based buying. But these two names
down substantially because of the worries. The big worries that
is that is really the overhang of the overall financial
US market that's not odd to you.
Speaker 4 (31:14):
And also that.
Speaker 2 (31:15):
Retail investors are really buying, but it's not necessarily the
institutional guys. So like, how does that factor in too?
You know, you're out like you're optimistic, but doesn't that
kind of concern you a little bit?
Speaker 5 (31:29):
Heay?
Speaker 8 (31:29):
There is their earnings were actually strong if you look
at the numbers, they did well this past quarter. That
they're concerning investors.
Speaker 6 (31:36):
It's a guidance right.
Speaker 8 (31:38):
Right, but since I mean we've been living with tariffs
for two months now, so it has been since liberation
Day as they like to call it. But the guidance
going forward is really what's worrying investors. I mean, honestly,
with the amount of uncertainty right now, why wouldn't CEOs
be saying, hey, this is an uncertain environment and kind
of trying to tamper down expectations. I think as investors,
(32:01):
if we didn't hear we're taking a step back going
hold out. Are you not seeing what's happening? So yes,
absolutely there's uncertainty, there's reasons to be worried. But honestly,
those names, they were beaten down a lot because they
had just been the leaders so strong prior to this move.
(32:22):
When you're looking at things like productivity AI, they're going
to be good again and even more since then. We
actually did buy into these bigger cap tech names once
we had this pullback, because they had been valued much
higher than they were now. And when you have an
opportunity to buy these names at a more reasonable valuation,
(32:44):
I mean you might as well at the end of
the day. And VideA is going to do better than
Coca Cola. Nothing against Coca Cola, but just their earnings
potential is higher. And if you can get a more
similar pe between a big tech name versus a stable's
name life, I would rather do it. So that's my
view on the tech names there. I think they've been
(33:06):
beaten down. They're going to participate more in this recovery
as we've been seeing tech has really been participating in
this recovery. Now once we're fully recovered, when we see
a broadening of leadership potential rotation of leadership, absolutely, and
we're watching for that. But here we'd rather be owning
those names, and we took the opportunity with this dip
to add to those names in particular.
Speaker 5 (33:27):
Right, so, I see your overweight stocks, but you also
said in your notes that you're still hedging with gold,
and I'm wondering what risks you're hedging for and then
what would have to happen for you to add more gold.
Speaker 8 (33:43):
Yeah, so we are overweight stocks as well as we
do hold our largest position is in gold. Now that's
still just under a ten percent positions about a nine
percent position, And really that's an opportunistic diversification, I would
call it. It's not like every time gold goes app
stocks go down or vice versa. It really moves differently,
and you see these large swaths of time where gold
(34:05):
does really well and then swats of time where they
go lousy as well. But right now is one of
those times where we really do see gold as performing well.
We originally bought it as an inflation hedge and that
was a good decision on our part. Now we're really
holding it as a more of a geopolitical risk hedge,
not just from a geopolitics standpoint, but also from there's
(34:28):
a lot of different moves being made all across the
world from all the central banks, So also from a
policy risk standpoint there as well.
Speaker 2 (34:37):
What about overseas interest and allocation and buying.
Speaker 8 (34:42):
Yeah, it's something we're definitely watching and we are interested
in potentially moving into foreign but that again will probably
more be after this recovery, once we look to see
more of that branding of leisured leadership and potentially that
rotation of leadership. Foreign was doing definitely interestingly this year,
(35:03):
but I think if you hop into it right now,
you have that potential to really get whipsof and we
didn't want to do that when some of these great
tech names and other names had gotten beaten down and
were more likely to participate in this recovery first. And
then potentially we'll see that rotation ship rotation into foreign leadership,
(35:24):
and that's when we would be more interested in getting
in then. So we're just being a little patient to
avoid that whipsoft, but it is definitely on our radar.
Speaker 2 (35:32):
Yeah, I would just point out, I mean the eurostocks fifty.
I know it's been beaten up and maybe not as
up as it was earlier this year, but it's still
up about eight percent year to date, and that compares
with still about a three and a half percent to
cline in the S and P five hundred, So you know,
betting overseas has still been pretty good this.
Speaker 5 (35:48):
Year, right this year, but in the longer term, no,
I know, but you know when you're yeah, well, Alexis,
we only have like forty five seconds left. But I'm
just wondering what's the general vibe you're getting from clients.
Are people panicked? Are they are they asking to go
to cash gold or are people more optimistic.
Speaker 8 (36:07):
We're really lucky with our client base. They've been through
markets like this with us, and they've seen really that
it's really difficult to have to go through moments like this.
But if you think about it, most of the time
you're hearing investors say that you want to buy low now.
That's really hard to do when you're emotionally charged. And luckily,
our clients trust us enough that we've had Yeah, we've
(36:29):
had some who are nervous who we just need to
talk to and then they wind up being fine, and
some who actually want to send us more money to
get it more invested right now. But really, how we
aim to make money for our clients is by participant.
Speaker 2 (36:43):
Oh sorry what no, we get a run unfortunately, but
thank you, thank you. I was glad we can check
in with you. Forgive me, Forgive Me. Alexis Brown Roberts
at Alexis Investment Partners.
Speaker 1 (36:53):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere where else you get your podcasts. Listen live
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(37:14):
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Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg Business
Week Daily reporting from the magazine that helps global leaders
stay ahead with insights on the people, companies, and trends
shaping today's complex economy. Plus global business, finance and tech
(00:23):
news as it happens the Bloomberg Business Week Daily Podcast
with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Speaker 2 (00:32):
As we saw with some of the last earnings, including
Apple and Amazon, tariffs are definitely making their mark on
many industries. We've talked about that a lot over the
last couple of hours, none more though perhaps so than
the auto industry, as we've reported on a lot as
well here at Bloomberg, and as Bloomberg's Hannah Elliott writes
in this week's Pursuits newsletter, quote, confusion and chaos have
rained since President Trump signed a proclamation on March twenty
(00:55):
six to implement a twenty five percent terrify autos and
parts imported into the United States. So what's a global
auto maker to do? Kind of looked into it. She
is Bloomberg Pursuit's autocommist co host of the Hot Pursuit podcast.
It can be found on the Bloomberg at Bloomberg dot
com and wherever you get your podcast. She joins us
from LA kinda great to have you here with Emily
and me Big Picture if we can just start there
(01:18):
and then we'll dig into the newsletter. But it all
kind of relates when you have conversations with global automakers.
How are they continuing to think about the tariffs, the
global tariffs, how they're managing and how they continue to
think about their global supply chains and sailing in the US.
Speaker 3 (01:36):
Yeah, it's been really interesting, and like we've talked about before,
it seems like each automaker is doing something slightly different.
I'll give you an example. Mercedes just announced this week
that they are going to actually be moving production of
one of their core segment vehicles. We don't know which
one yet, but they will be moving production of.
Speaker 4 (01:55):
That vehicle into the US. So this is how they
are coping.
Speaker 3 (01:58):
They're just saying, basically, all right, if we're gonna be
taxed on vehicles we import, we're gonna start making more
vehicles in the US.
Speaker 4 (02:06):
So that is one example.
Speaker 3 (02:08):
Ferrari, as we've talked about, has just said we're gonna
have a ten percent across the board increase in prices.
Let's be honest, probably not a lot of Ferrari owners
are going.
Speaker 4 (02:17):
To bat any at that.
Speaker 3 (02:18):
In fact, maybe it makes the cars even more desirable.
Asin Martin for instance, has said they're going to stop
importing new cars for the moment, put a pause on
it and see how this all shakes out. So again,
it's like case by case by case. The main thing
that I hear that everybody is saying is just it's very,
very difficult to plan when you don't know what the
(02:40):
target is. They would like some consistency and a target
that doesn't move, and the target.
Speaker 4 (02:45):
Is still moving, which makes it difficult to.
Speaker 5 (02:48):
Plan well, but it sounds like Mercedes is at least
planning a little bit. Do you do you know any
more details about just kind of like how they're gonna
do this, because are they gonna build a new factory
and they still have I'm assuming many many different car
parts that are all going to go into this vehicle.
(03:09):
It it just sounds like a lot of not to
have a pun here, but a lot of moving parts.
Speaker 4 (03:14):
That's a great question, Emily.
Speaker 3 (03:17):
The good thing that Mercedes has going for is it
already is established in the US as a major major builder.
Mercedes has been here for decades. They've got a factory
in the South. They have over eleven thousand employees that
are US workers, plus four hundred suppliers or so, all
in the US. So this is not as necessarily a
(03:38):
heavy lift as if they had nothing and then they're
just going to decide we're going to build a new
factory and do all these things.
Speaker 4 (03:44):
They're very firmly established.
Speaker 3 (03:45):
In fact, what Ola Collinius told me about a month
ago when I was with him in Rome is that
they consider themselves an American company. And I know that
sounds a little bit weird, but considering how long they've
been in the US and how many Americans they employ,
Ola was really making the case that, hey, we are
an American company. Let's not forget even a company like Tesla,
(04:07):
which does have factories in California and Texas, also has
a big factory in China. So you kind of get
into this question of what is really American.
Speaker 4 (04:16):
It's a bit of a gray area when you start.
Speaker 3 (04:18):
Really counting components and imports and production and all of that.
Speaker 2 (04:22):
Now, I was kind of impressed by those numbers. I
didn't realize how first of all, how long Hannah, and
how much that they were doing. I knew they did some,
but I didn't realize so much the presence. So they
can really say made in America completely.
Speaker 4 (04:36):
BMW's in the same position.
Speaker 3 (04:37):
They've got literally, I believe eleven thousand workers in the US.
Their plant in Spartanburg has been there for years. They
really are part of the fabric, especially in the South,
providing a lot of American jobs. So their argument is, hey,
why are we being penalized as if we are not
putting things back into the country.
Speaker 5 (04:56):
Okay, tell us about what's happening in Miami this weekend.
I don't think you're going, but you know the plans.
Speaker 4 (05:04):
I know the plan I am this year.
Speaker 3 (05:06):
I am not going, but of course, this is year
four of Formula one in Miami.
Speaker 4 (05:12):
It's funny you should mention it.
Speaker 3 (05:13):
Just this week we spoke with Allie Berriman, who's the
driver for Hawes. He's nineteen years old. This is his
first year in Formula one. Clause, of course, is an
American team. He's racing in Miami this weekend.
Speaker 4 (05:26):
It's going to.
Speaker 3 (05:26):
Be a really big deal because I just saw that
they have extended the deal to keep the race in
Miami for until twenty forty one. So we're gonna be
in Miami for a while. And the parties.
Speaker 4 (05:39):
Look really extreme.
Speaker 3 (05:41):
I just saw they've got Tso DJing too, so it's
gonna be a big weekend.
Speaker 2 (05:46):
It's quite an event, right, no doubt about it. Hey,
listen before you go. In the newsletter, you also talk
about what you've been loving lately. It's actually in our backyard.
It's in Brooklyn.
Speaker 4 (05:58):
Oh, Wheels of New York.
Speaker 3 (06:00):
This has been This is my favorite car show that
I've been to in a year at least.
Speaker 4 (06:05):
It was so cool.
Speaker 3 (06:06):
It's Wheels of NYC is the Instagram handle. It was
a car show of vintage cars, everything from Ferraris to
like Grand Nationals like Kendrick Lamar loves the Porsche's to
Rolls Royces, and the vibes were good and it was
in the Brooklyn Navy Yard.
Speaker 4 (06:23):
I just had the best time. I loved.
Speaker 3 (06:24):
I highly recommend anyone going. They're gonna have another one
pretty soon.
Speaker 2 (06:27):
So it's not a show that I've heard about it.
I mean it's been around for a while. No, it's new.
Speaker 3 (06:32):
No, it's new, it's niche. This is not a big
established This is like a very grassroots organic it's not corporate.
It's just people who love cars. And I just love
that it was all ages, all races, all different types
of people and styles, and everyone was just happy. It
felt like a little slice of heaven. It was really great.
Speaker 5 (06:54):
Okay, very quickly you got an email from Porsche. It
was a mysterious note they're building this. Well, this picture
that you have in the newsletter, I don't know if
it's it's a makeup, if it's AI, or it's a
real car.
Speaker 4 (07:06):
Yeah, it looks crazy.
Speaker 3 (07:08):
Porscha likes to tease us with these special projects that
they have.
Speaker 4 (07:12):
The short of it is this.
Speaker 3 (07:14):
The Portcha nine seventeen is a very famous race car.
They actually made one that was legal for the street,
and Porscha has has sort of teased us, teased us
with a picture of the car and then sort of saying,
something's happening in June. Now we all know, as you
know that Lemon, this big endurance race happens in June,
(07:35):
so it's kind of like, are they going to be
bringing a car back to race? You know, are they
making a new one? We don't really know, but I
think it could be something road legal that we might
see in June.
Speaker 4 (07:47):
So stay tuned.
Speaker 2 (07:48):
Such cool stuff and it's all in the newsletter that
you can check it out. Hannah, thank you so much.
Have a good weekend. Bloomberg Pursued Auto columnist, cohost of
the Hot Pursuit podcast.
Speaker 4 (07:59):
Download it.
Speaker 2 (08:00):
This is Bloomberg.
Speaker 1 (08:01):
You're listening to the Bloomberg Business Week Daily podcast. Catch
us live weekday afternoons from two to five eas during it.
Listen on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.
Speaker 2 (08:16):
Hey, folks, we're going to stay with supply chains. We've
got someone who's been following, studying, talking about supply chains
for more than two decades. We head to Florida, Sarah
Barnes Humphrey. She's an entrepreneur and an influencer, as we mentioned,
studying supply chains for a long time. She's founded the
Let's Talk Supply Chain brand and podcast. She's also co
(08:36):
founder and CEO of a bid and freight platform called
ships Inc. And she joins us. Hey, Sarah, good to
have you here. Before we get into the nitty gritty,
tell us about your study of supply chains for the
past two decades, because it's obviously a super timely topic today.
But I don't know that everybody cared so much a
(08:57):
few decades ago, maybe during the pandemic, but necessarily twenty
years ago.
Speaker 6 (09:02):
Yeah, no, they definitely didn't. Thanks for having me on
the show.
Speaker 7 (09:05):
So I've basically been talking about supply chain at the
dinner table since I was nine.
Speaker 6 (09:09):
My parents owned a logistics company.
Speaker 7 (09:12):
And I worked in the family business operations and sales,
and then ended up funding our media business, which is
let's talk supply chain, so podcasts and live shows and
all sorts of things.
Speaker 5 (09:23):
Okay, so let's start high level. How are global supply
chains looking in the here and now? There's a lot
of fear about what.
Speaker 4 (09:32):
Tariffs are going to do.
Speaker 5 (09:33):
But in the here and now, what are you seeing?
Speaker 7 (09:36):
Yeah, so I was at a conference last week and
there was a lot of optimism. It was a breakball conference,
but I do know there's a lot of uncertainty. There's
a lot of supply chains being redesigned. I think the
mindset is going from what are the challenges to what
are the opportunities? How can we design our supply chains?
(09:58):
What does that need to look like. Examples I've seen
recently so Apple a couple of years ago, they moved
their production or they're manufacturing some of it into India,
and they did that because they wanted to use India
as a new consumer market for them. And it's really
paying off today because they're going to be able to
(10:18):
produce iPhones in India and skirt some of the tariffs
in China to be able to bring iPhones to the
US as well. And there's a couple of other examples
where you know, the electric vehicle maker Pollstar, they've paused
their annual forecast and they're shifting manufacturing to the US
and Europe, whereas Aston Martin is limiting exports to the US.
Speaker 6 (10:41):
So I think everybody's just sort.
Speaker 7 (10:43):
Of taking a look at how do we want to
spend our risk dollars, what does that look like, and
what do we want to do right now?
Speaker 2 (10:51):
Well, you know, I think about all the globalization everybody's
been pushing to over the last few decades, like that
was the way to go, go to the low cost producer,
you know, go to the countries that could do it
the best. It just kind of made a lot of sense.
Do you think that's over?
Speaker 6 (11:06):
No, I don't think it's over.
Speaker 7 (11:07):
I think people are waiting and seeing I think a
lot of retailers were able to get product out before
the tariffs hit. Some retailers are going to get hit
with the new tariffs. But I think there's a lot
of organizations that are pausing orders right now, which is
a bit of a problem right because if we think
about it, we're going into peak season, and peak season
(11:29):
is where retailers and organizations are bringing in products for
holiday season. So depending on how long this is going
to go will determine whether they're going to turn on
manufacturing again and whether they're going to order those products
for holiday season. So we might not actually see some
of the effects for another five to six months when
people are starting to shop for holiday.
Speaker 4 (11:52):
How is shipping looking right now?
Speaker 5 (11:54):
Because there were a few analysts earlier in the week
and even the week before who had started to fly
shipping data that cargo shipments are slowing, and then that's
going to mean that we're soon going to see shelves
empty because trade is just going to stop. Are those
fears overblown?
Speaker 8 (12:14):
No?
Speaker 6 (12:14):
I don't think so.
Speaker 7 (12:15):
The Port of Los Angeles came out with a stat
that said that they're going to see a decline of
thirty five percent, and they're also looking at every fourth
vessel not stopping at the port, and so what's going
to happen is not as much cargo is coming in,
and so the shipping lines are actually going to start
charging more.
Speaker 6 (12:35):
For container shipping as well.
Speaker 7 (12:37):
So not only are we going to have higher costs
for goods, but we're also going to have higher shipping
costs on container shipping because those vessels, those steamship lines,
they're not gonna want to lose money either.
Speaker 2 (12:50):
You know. Do you think I don't know, I think
about the negotiations between US and China or whether or
not there really is any negotiations, right, I mean, do
you think when all a said and done, that we're
going to find more reasonable trade deals created and it
will go back to kind of somewhat business as usual
or no, things are going to change dramatically going forward.
Speaker 6 (13:13):
So I'm not sure.
Speaker 7 (13:14):
I think at this point nobody really has a crystal
ball for that. I mean, if we think about what
has happened, do companies.
Speaker 2 (13:20):
Or do companies that you talk to or that you know,
do they think it's going to go back to more
of kind of business as usual, or they're not quite
so sure.
Speaker 7 (13:29):
They're not quite so sure right now either. I think
everybody is sort of in a wait and see type
mode at the moment with the changes that came in
for Sheen and Timu today, you know, we're seeing eighty
dollars shipments that now has close to sixty nine dollars
in shipping and imports import charges. So these are the
(13:51):
types of things that until it happens, we're not entirely
sure how long it's going to stay and what that
looks like, and so how do you plan for that?
So a lot of forecasting and planning is really hard
at the moment, and so supply chain teams have a
lot on their plates right now.
Speaker 5 (14:10):
I'm also wondering, you know, you talk about manufacturing, do
you think this idea that you know, companies are going
to be able to bring the manufacturing to the US
build factories. Here is the supply chain in the US
equipped to handle, you know, what could be an influx
of a ton more domestic manufacturing very quickly.
Speaker 7 (14:34):
Yeah, I think that's a great question, and I think
there could be room for some I'm not sure we
can do it all in the US. I think there's
a number of different factors. There's some labor factors. I
saw somebody the other day talking about how machinery into
the US because of the tariffs might be more expensive
as well.
Speaker 6 (14:55):
So I'm not sure we can.
Speaker 7 (14:56):
Necessarily equip those facilities with the machinery that we need
to manufacture either. And also, it takes a long time
to be able to set up manufacturing in a new location.
I mean, if you take that example of Apple that
I mentioned earlier, it's taken them a couple of years
to shift some of that manufacturing into India, and it's
(15:17):
paying off today because of the tariffs, But at the
end of the day, it's a really long term play.
And a lot of people were moving to Mexico and
now they're unsure how that actually fits into their manufacturing.
Speaker 6 (15:31):
Like Cadence as well.
Speaker 2 (15:33):
That's what's fascinating Sarah and I think this is something
that we talked about a lot after COVID. We would
have just even architects or developers coming in and saying,
you know where there's a lot of activity Mexico because
people are moving operations to Mexico and coming off of COVID,
we realized how vulnerable our supply chains really really were
(15:53):
and that we wanted stuff closer to home. And so
like that shift already started happening. I mean, what is
going on behind the scenes. Even with Apple you mentioned India.
We have talked with our mark German, who covers that
company flawlessly and in depth, and you know, we've been
having conversations how Apple was spreading out its supply chain
(16:16):
but still so relying on China still is. But then bam,
it was like, well, wait a minute, we can next
year have all the iPhones that are needed in the
United States come from India. So I feel like there's
stuff that's been going on very quietly. What are you
hearing about what companies are doing quietly as they continue
to maybe spread their supply chain around.
Speaker 6 (16:37):
Yeah.
Speaker 7 (16:37):
Again, I think they're looking at the design of their
supply chains. Where do I want to spend my risk dollars,
Where can I actually source the components that I need
to be able to create the products that I need.
Just another mention on Apple, they looked at manufacturing the
iPhone in the US and it would cost the US
consumer thirty five hundred dollars, So there's a lot.
Speaker 2 (16:58):
Of on the phone. I mean fat in my household,
and that's what almost ten thousand dollars. That's a lot, all.
Speaker 7 (17:06):
Right, go ahead, Yeah, No, I just mean like there's
it's different for different organizations, and supply chains look different
across the board. And so for some manufacturing in the
US makes sense, especially for medications and chips, for technology
and things like that what you were talking about coming
out of the pandemic. Those are the things we want
(17:28):
to manufacture close to home. But for some organizations it
really doesn't make any sense. Taking that Apple example, at
thirty five hundred dollars for an iPhone, nobody's going to
spend that kind of money. So I think it's a
bit of a push pull. Everybody's having this discussion. They're
looking at the design, Where can we source, where can
(17:49):
we purchase, Where can we manufacture? What makes the most
sense for us and for our customers.
Speaker 5 (17:55):
Sarah, what are you seeing from small businesses? What are
the particular challenges you know someone who's in the US
is going to face if they're a small business.
Speaker 7 (18:06):
Yeah, I think if they're a product based business, they're
sort of rethinking what it is that they want their
business to look like. I was recently reading an article
about there was a bunch of small businesses that were
sort of looking at the tariffs and saying, we want
to be exempt from it.
Speaker 6 (18:23):
And one of those.
Speaker 7 (18:24):
Small business actually said they're going to pivot from products
into services because that makes the most sense for.
Speaker 6 (18:30):
Them right now.
Speaker 7 (18:31):
And I think back to the pandemic and some small
businesses pivoted what product they were actually selling and someone
into hand sanitizer. So I feel like this is kind
of a similar thing at the moment that small businesses
were faced with during the pandemic.
Speaker 2 (18:48):
All right, So when you kind of watched, like probably
all of us, the news coming out of certainly the
White House, and then just kind of what you are
hearing from folks in terms of managing their own supply
chains and what you're seeing, I don't know, how are
you thinking about the next six months or so.
Speaker 7 (19:04):
I think that it's going to be very unpredictable. I
think that it's extremely uncertain right now, and if retailers
and organizations are pausing shipments at the moment, I don't
think we're going to see the ripple effects for another
five to six months, and I think we may see
some challenges over the holiday season. I think organizations are
(19:25):
sort of in a wait and see right And I
just don't think that anybody has the answers right now
until we figure out where those tariffs are going to land.
Speaker 2 (19:34):
Well and right, as you said, and we talked kind
of kicked off in the two pm hour, talking with
our Mike McKee, who follows the economy, and talking about
the jobs report, and it looked like things at this
point are doing pretty well. But the concern is when
this data starts to hit, whether it's consumers. We've seen
it in sentiment, but when it comes into the actuality
of it, I am curious. Are you thinking a recession
(19:57):
is likely too? From the conversations you're having in the
pe you're talking to.
Speaker 6 (20:01):
I'm not sure.
Speaker 7 (20:02):
Everybody's kind of all over the map. Some have said possibly,
some are saying we might not. I think it's too
early to tell, to be perfectly honest with you.
Speaker 2 (20:14):
Okay, yep, that's why we're on pins and needles. Not today.
Everything seems awesome today. Good to leave it there. Hey, Sarah,
thank you so much. Good to meet you and talk
with you. Sarah Barnes Humphrey, founder of Let's Talk Supply Chain,
joining us there from Florida.
Speaker 1 (20:30):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
Android Auto with the Bloomberg Business App. You can also
listen live on Amazon Alexa from our flagship New York station,
Just Say Alexa Play Bloomberg eleven thirty So.
Speaker 2 (20:49):
We talked about last week Amazon and Apple, both noting
kind of how their businesses were affected by tariff and
trade policies. Amazon going so far to note that processionary
fears and glob blackconomic and geopolitical conditions are in their forecast.
Another company that's got a great read on the consumer's Wayfair.
They reported earnings this week. They came in better than
expected as consumers brought forward spending while suppliers are holding
(21:12):
back from price increases. We caught up with Wayfair c
FO Kate Gulliver. We talked to earning's business, the outlook
and how the US consumer is doing.
Speaker 9 (21:21):
To your point, we had significant pull forward in the
category in the COVID time right, so in the sort
of twenty twenty twenty twenty one time since then, the
category has been down consistently since then. The category so
that was actually below you know, starting to be below
twenty nineteen levels.
Speaker 4 (21:37):
Right, So we're.
Speaker 9 (21:38):
Seeing a category that has historically been over the last
few years quite depressed, which may be different than you know,
some of the other consumer discretionary categories that the folks
are referring to. That said, yes, it's absolutely an uncertain environment.
Speaker 2 (21:52):
All right, everybody take a shot, because every time we
hear uncertain, I mean, that's it.
Speaker 6 (21:56):
Daked.
Speaker 10 (21:56):
That's the word of the year. I think I can
safely say.
Speaker 4 (21:59):
Totally, totally. All right, that's wayfair.
Speaker 2 (22:01):
CFO Kake Gulliver, Hey, let's get more into what CFOs
are doing in this environment. The conversation she's been having
with members of the CFO suite. Nina trentt menis senior
editor a Bloomberg News author of CFO Briefing newsletter. You
can find it at Bloomberg dot com slash CFO Dash Briefing.
A new one comes out on Sunday.
Speaker 4 (22:17):
How are you?
Speaker 11 (22:18):
Thank you? I'm good, that's good.
Speaker 4 (22:20):
Thanks for having me.
Speaker 2 (22:21):
Well, I'm curious the CFOs that you talked to how
are they feeling, Are they good? Are they saying uncertainty
or uncertain times a lot in conversations. What are you hearing?
Speaker 11 (22:29):
Yeah, and certainly is probably the number one word, which
sometimes is made harder by the fact that we aren't
supposed to be writing it so often, given that, well
what does this actually mean? And also we've heard it
a lot during the pandemic? She mentioned it, and so
the question is, of course, well, how do you navigate that?
Of course we need to give CFOs also a bit
of a pause, given that there's so many variables within
(22:53):
their equations that they just don't have any information about
tariffs being one of them. Way by sort of Yes,
it's fair to say that times are very uncertain for
CFOs right now.
Speaker 10 (23:03):
You have these two variables, and of course they're related.
The first is uncertainty again I say it about the
kind of broader economy and the trade picture, and the
second has to do with just the market volatility we've seen.
How is that impacting the appetite for deal making among CFOs?
I mean, going back to the campaign in the election,
there was this promise of the deal market opening up
(23:25):
and there was going to be a huge swell of them.
Has it come to pass. Are deals getting done?
Speaker 11 (23:30):
Some deals are getting done, yes, but we haven't necessarily
seen this huge rise or surgeon deals that people were
expecting because the deregulation that people were hoping for so
far hasn't really happened, and instead there has been a
lot of stuff that is not necessarily very conducive to deals, terrors, volatility,
market volatility, and so I think for certain deals, yes,
(23:53):
they're still going through. For example, Counagar this week announced
in a divestiture where they're selling one of their brands
to a PE firm. So those deals get done, and
I think they're assuming it's going to be done in
the next few months, so not necessarily a big challenge
for them. But I think then also we're seeing that
some deals are sort of hitting the brakes. I know,
(24:13):
deals involving China, involving other countries. So I think bilateral
deals and even multinational deals are very tricky these days.
Speaker 2 (24:21):
Yeah, it's interesting. I feel like we've been all talking
about especially the private equity guys, right the private world
just waiting for the environment so they can kind of
start selling stuff or things to go public. So that
they can kind of either return money to investors and
move on to new deals. Having said that, always love
the different CEOs CFOs. Excuse me that you talk to
different areas of our world. Tell us who you've been
(24:44):
talking to. You mentioned Canagra, but who else have you
been talking to and what they're saying?
Speaker 11 (24:48):
Yeah, So this week we spoke to a few CFOs.
Canago was one of them. Then we spoke to the
CFO full Seam, which is a Swiss materials concrete stuff
co create concrete maker.
Speaker 4 (25:01):
Correct, it's like the core of right.
Speaker 11 (25:04):
And then also a few a few other CFOs, including
SMP Global. Interestingly enough, those companies are amongst the companies
that are saying, okay, well, actually yes, the environment is tricky,
but still we want to pull ahead with with our deals.
So Whole SAM is in the process of spinning off
its US and North America business, something that had started
(25:28):
a while ago, so it's not something that they triggered recently,
but they're expecting that spin to to take effect in
May or in June. And I asked them, well, are
you going ahead with it? Isn't the market volatility a
tricky thing given that you're planning a spin off. This
involves to some degree markets have to be confusive. You
don't want the use your your shares to sell off
on the day that the spin takes effect, And they
(25:49):
were saying, well, no, the strategic rationale still is very
much true and wholes and therefore, yeah, we're we're pulling
through with the deal and we're we're not necessarily pausing it.
Interesting enough, they're also pointing out that the dynamics in
their business in North America versus in Europe are very different,
where they were saying, well, in North America we have
a lot of construction spending, and in Europe we are
(26:11):
focusing on decarbonization. For example, let's CO two heavy concrete,
as you pointed out, So they were saying, basically, it
makes a lot of sense for these businesses to be separate.
And so they think to some degree that the tariff
tensions that we're seeing right now and the divergence between
the US and the rest of the world might actually
be sort of like, to some degree a supporting factor
(26:32):
for the spin off, which was interesting because my assumption
was that they would be like, oh, yeah, well timing
isn't great.
Speaker 2 (26:38):
I think it's funny right strategy sometimes or fundamentals still matter.
Speaker 10 (26:41):
Yeah, I'm curious in the minute we have left, how
persuadable these CFOs are. So now you talk to folks
at advisory firms as well, what's the message that they're
conveying to CFO is just about whether or not to
move forward with deals or to pause or to reconsider them.
Speaker 11 (26:55):
Of course, advisory folks, to some degree always when they
talk to us, they want to talk to the books.
Some degree, what they tell CFOs is.
Speaker 4 (27:02):
Different than.
Speaker 6 (27:04):
Just kidding.
Speaker 11 (27:05):
But they've certainly told me that they have a lot
in the pipeline, and they see a lot in the pipeline.
I think what they are also telling their clients that
they work with is that, well, you need to really
do scenario analysis here, you need to sort of really
work through Okay, well, what are your assumptions, what do
you think is going to happen, and how will the
deal work in a different environment, just mentioning tariffs for example,
(27:29):
And so I think they were saying that select deals
still go through, that it's a case by case basis,
industry by industry basis. But yeah, I think they were
all hoping for more certainty as well. I think not
just the CFOs, but also the deal advisors for that.
Speaker 2 (27:47):
That's what's kind of wild. I think in this environment
are Diena, Marn't Adams too, just saying I don't think
I've ever seen a company come out and give you
two you know, earning scenarios could happen, this could happen
this way here, possibly recessioned so then not so good
things go back to normal. And I think it's just
this scenario led environment. I think companies do it all
(28:08):
the time, but this is like amped up in a
big way.
Speaker 11 (28:11):
Yeah, And also we're seeing sort of if you look
at the guidance that companies are putting out right now,
of course we've seen a fair amount of companies pulling guidance.
All we all also.
Speaker 2 (28:18):
See get like, okay, we can't give you an outlook,
but when you give like a couple of scenarios as wild.
Speaker 11 (28:23):
Well, we've also been seeing, of course, companies widening their guidance,
which then also gives them gives them more room to
some degree. It's understandable then also if you look at
it from the analyst perspective, like companies that withdraw their guidance,
that's basically for any analyst. Very difficult to then work
with in terms of factoring models. But figure out we're
all coming to the same question of not knowing what's
(28:43):
going to happen.
Speaker 2 (28:45):
Dare I say it uncertain? Take us away, everybody, Nina,
thank you so much as always, Nina Trentman, Senior editor
of Bloomberg News. Check out the CFO Briefing newsletter comes out
on Sunday on the Bloomberg and at Bloomberg dot Com.
How about you let me drive?
Speaker 7 (29:01):
Oh no, no, no no, this is not a toy's going
to drive?
Speaker 2 (29:05):
Alright, please, I'll do the gravels. Let's wat I want
to drive.
Speaker 6 (29:12):
It's good question. This is the Drive to the Clothes.
Speaker 1 (29:19):
Punster music, Well drivers on Bloomberg Radio.
Speaker 5 (29:24):
All right, time now for Drive to the Clothes with
Alexis Brown Roberts, COO at Alexis Investment partners with us
from Montgomery, Texas, and she's joining.
Speaker 4 (29:35):
Us right now.
Speaker 5 (29:35):
When the S and P five hundred is on track
for its longest streak of gains since two thousand and.
Speaker 2 (29:41):
Four, feels like a big deal.
Speaker 5 (29:42):
It feels like a big deal. But let's see what
Alexis thinks. Is this a sustainable bounce off of the
lows or are these gains just going to reverse soon
and then next week we're going to be talking about.
Speaker 2 (29:54):
Yeah, O, there's so much read exactly.
Speaker 8 (29:58):
Well, Hi, Carol and Emily. It's great to see you again, Carol,
and it's nice to meet you know, thank you both
for having me on. And that really a million dollar
question right now, isn't It's what investors are all asking
each other themselves. But we think it's sustainable. I mean,
we came into this year expecting a very volatile but
overall positive year, although admittedly a little bit of a
(30:20):
different path. We thought we were going to be more
positive in the front end and then have this volatility
in the back end. Looks like we're flipping that around.
But we do see this as being sustainable. I mean,
earnings are still doing well and honestly, there's a lot
of cash on the sidelines.
Speaker 2 (30:35):
And as I have to stop you because what's interesting
is you say earning's going well. Amazon, Apple, massive companies,
massive waitings in the s and P five hundred, the
Nasdaq one hundred. We talked with our Eric Greener about
this that it is unusual, especially Apple, you know, often
(30:55):
so goes Apple, so goes the market, and that to
see kind of broad based buying. But these two names
down substantially because of the worries. The big worries that
is that is really the overhang of the overall financial
US market that's not odd to you.
Speaker 4 (31:14):
And also that.
Speaker 2 (31:15):
Retail investors are really buying, but it's not necessarily the
institutional guys. So like, how does that factor in too?
You know, you're out like you're optimistic, but doesn't that
kind of concern you a little bit?
Speaker 5 (31:29):
Heay?
Speaker 8 (31:29):
There is their earnings were actually strong if you look
at the numbers, they did well this past quarter. That
they're concerning investors.
Speaker 6 (31:36):
It's a guidance right.
Speaker 8 (31:38):
Right, but since I mean we've been living with tariffs
for two months now, so it has been since liberation
Day as they like to call it. But the guidance
going forward is really what's worrying investors. I mean, honestly,
with the amount of uncertainty right now, why wouldn't CEOs
be saying, hey, this is an uncertain environment and kind
of trying to tamper down expectations. I think as investors,
(32:01):
if we didn't hear we're taking a step back going
hold out. Are you not seeing what's happening? So yes,
absolutely there's uncertainty, there's reasons to be worried. But honestly,
those names, they were beaten down a lot because they
had just been the leaders so strong prior to this move.
(32:22):
When you're looking at things like productivity AI, they're going
to be good again and even more since then. We
actually did buy into these bigger cap tech names once
we had this pullback, because they had been valued much
higher than they were now. And when you have an
opportunity to buy these names at a more reasonable valuation,
(32:44):
I mean you might as well at the end of
the day. And VideA is going to do better than
Coca Cola. Nothing against Coca Cola, but just their earnings
potential is higher. And if you can get a more
similar pe between a big tech name versus a stable's
name life, I would rather do it. So that's my
view on the tech names there. I think they've been
(33:06):
beaten down. They're going to participate more in this recovery
as we've been seeing tech has really been participating in
this recovery. Now once we're fully recovered, when we see
a broadening of leadership potential rotation of leadership, absolutely, and
we're watching for that. But here we'd rather be owning
those names, and we took the opportunity with this dip
to add to those names in particular.
Speaker 5 (33:27):
Right, so, I see your overweight stocks, but you also
said in your notes that you're still hedging with gold,
and I'm wondering what risks you're hedging for and then
what would have to happen for you to add more gold.
Speaker 8 (33:43):
Yeah, so we are overweight stocks as well as we
do hold our largest position is in gold. Now that's
still just under a ten percent positions about a nine
percent position, And really that's an opportunistic diversification, I would
call it. It's not like every time gold goes app
stocks go down or vice versa. It really moves differently,
and you see these large swaths of time where gold
(34:05):
does really well and then swats of time where they
go lousy as well. But right now is one of
those times where we really do see gold as performing well.
We originally bought it as an inflation hedge and that
was a good decision on our part. Now we're really
holding it as a more of a geopolitical risk hedge,
not just from a geopolitics standpoint, but also from there's
(34:28):
a lot of different moves being made all across the
world from all the central banks, So also from a
policy risk standpoint there as well.
Speaker 2 (34:37):
What about overseas interest and allocation and buying.
Speaker 8 (34:42):
Yeah, it's something we're definitely watching and we are interested
in potentially moving into foreign but that again will probably
more be after this recovery, once we look to see
more of that branding of leisured leadership and potentially that
rotation of leadership. Foreign was doing definitely interestingly this year,
(35:03):
but I think if you hop into it right now,
you have that potential to really get whipsof and we
didn't want to do that when some of these great
tech names and other names had gotten beaten down and
were more likely to participate in this recovery first. And
then potentially we'll see that rotation ship rotation into foreign leadership,
(35:24):
and that's when we would be more interested in getting
in then. So we're just being a little patient to
avoid that whipsoft, but it is definitely on our radar.
Speaker 2 (35:32):
Yeah, I would just point out, I mean the eurostocks fifty.
I know it's been beaten up and maybe not as
up as it was earlier this year, but it's still
up about eight percent year to date, and that compares
with still about a three and a half percent to
cline in the S and P five hundred, So you know,
betting overseas has still been pretty good this.
Speaker 5 (35:48):
Year, right this year, but in the longer term, no,
I know, but you know when you're yeah, well, Alexis,
we only have like forty five seconds left. But I'm
just wondering what's the general vibe you're getting from clients.
Are people panicked? Are they are they asking to go
to cash gold or are people more optimistic.
Speaker 8 (36:07):
We're really lucky with our client base. They've been through
markets like this with us, and they've seen really that
it's really difficult to have to go through moments like this.
But if you think about it, most of the time
you're hearing investors say that you want to buy low now.
That's really hard to do when you're emotionally charged. And luckily,
our clients trust us enough that we've had Yeah, we've
(36:29):
had some who are nervous who we just need to
talk to and then they wind up being fine, and
some who actually want to send us more money to
get it more invested right now. But really, how we
aim to make money for our clients is by participant.
Speaker 2 (36:43):
Oh sorry what no, we get a run unfortunately, but
thank you, thank you. I was glad we can check
in with you. Forgive me, Forgive Me. Alexis Brown Roberts
at Alexis Investment Partners.
Speaker 1 (36:53):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere where else you get your podcasts. Listen live
weekday afternoons from two to five pm Eastern on Bloomberg
dot com, the iHeartRadio app, tune In, and the Bloomberg
Business App. You can also watch us live every weekday
(37:14):
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